How to compare different prop firms effectively

With a growing number of prop firms in the market, it can be challenging to choose the right one for your trading style and goals. In this guide, we go through the most important factors you should consider when comparing prop firms, so you can make an informed decision.

Why is choosing the right prop firm important?

Choosing the right prop firm can be the difference between success and failure in your prop trading journey. Each firm has its unique strengths, weaknesses, and conditions that can affect your trading experience and ability to generate income.

A prop firm that fits well with your trading strategy, risk tolerance, and goals can make the entire process smoother and more profitable. Let's go through the most important factors to consider.

1. Account sizes and costs

One of the first factors to consider is which account sizes are available and what they cost. Larger accounts offer greater potential for profits but typically have higher fees.

2. Evaluation conditions

Evaluation conditions are among the most important aspects to compare. These include:

• Profit goal: Typically between 8-12%, but can vary
• Time limit: How long you have to reach your goals (typically 30-60 days)
• Minimum number of trading days: Some firms require a minimum number of days with active trading
• Number of phases: Most firms have a two-phase evaluation (Challenge + Verification)

Compare these conditions between different firms and determine which one fits best with your trading style. If you are a more conservative trader, choose firms with lower profit goals and longer time periods. If you are more aggressive, you can choose firms with higher profit goals.

3. Trading rules and restrictions

Trading rules can vary significantly between different prop firms. It's important to understand these fully as breaking the rules can lead to disqualification.

Common rules to compare:

• Maximum daily loss: Typically 4-5% of the account
• Maximum total loss: Often 8-10% of the account
• Stop loss requirement: Some firms require mandatory stop loss on all positions
• Held position: Rules around open positions over the weekend
• News handling: Restrictions for trading around economic news releases
• Maximum position size: Restrictions on how large a single position can be
• Trading overnight: Are positions allowed to be open overnight?

4. Profit sharing and payouts

This is obviously one of the most important aspects - how much of the profit do you keep and how do payouts work?

Factors to compare:

• Profit sharing structure: Typically between 70-90% to the traders
• Payout frequency: Monthly, bi-weekly, or weekly
• Minimum payout amount: Some firms have minimum limits
• Scaling program: Opportunity to increase account size based on performance
• Payout methods: Bank, PayPal, Crypto, etc.
• Fees for payouts: Some firms charge fees for transfers

For Swedish traders, it's especially important to check which payout methods are offered and if there are any fees for international transfers.

5. Platforms and instruments

Check which trading platforms and instruments are available. This is especially important if you are already comfortable with a specific platform or focus on certain markets.

6. Reputation and reliability

Check the firm's reputation and reliability. A firm with a long history of payouts and satisfied traders is generally safer than newer alternatives.

Ways to assess reliability:

• Read reviews from other traders (especially Swedish)
• Check how long the firm has been active
• Look for transparency in their terms and rules
• Check their customer service (test asking questions before buying)
• Check if they have official regulation or registration

7. Customer service and support

The quality of customer service can make a big difference, especially when you encounter problems or have questions about rules and terms.

Considerations for customer service:

• Is support available in Swedish or just English?
• What times are support available? (especially important if you trade outside regular business hours)
• What communication channels are available? (chat, email, phone)
• How quickly do they normally respond to questions?

Test customer service before you go with it by asking a few questions about their program. Their answers can give you a good indication of service level.

8. Educational resources

Many prop firms offer educational resources that can help you improve your trading skills.

Educational materials to look for:

• Webinars and workshops
• Trading guides and articles
• Market analysis
• Community forum where traders can share experiences
• Personal coaching (offered by some firms)

Even though this shouldn't be the deciding factor, good educational resources can be especially valuable for less experienced traders.

9. Scaling options

Check what opportunities there are to scale up your account after you've shown consistent profitability.

Common scaling options:

• Automatic account size increases based on milestones
• Opportunity to manage multiple accounts
• Increased profit sharing based on the length of the partnership or performance

This is especially important if you see prop trading as a long-term career path and want to maximize your income potential over time.

Conclusion: Create your own comparison matrix

After considering all these factors, we recommend that you create your own comparison matrix where you rate each prop firm based on the aspects that are most important to you.

Remember that no prop firm is perfect for all traders. The best prop firm for you depends on your specific trading style, risk tolerance, capital, and goals.